Thinking of a big change ie./moving to the US

First of have to compliment this site. I had many of the questions, I had answered.

My husband has been working under a L1b visa for the last 6 months, and he believes his employer will be applying for a green card for him shortly. Currently he only comes to Canada for a third of the calendar year. Since we have a young family I have been seriously thinking of relocating us to the usa.

Since this is a huge life change i had a few question.

1.) are we better of waiting until he gets a green card to purchase a home, or if we can come up with the 25% will that be sufficient enough for the banks.

2.) If we keep our home in Canada, and rent it out what are the tax implications are we dually taxed, or only in the states since are whole family would know reside in the us.

3.) Most people have informed us that since the family is in canada it establishes permit ties to canada therefore creating dual tax. Well I realize there are foreign taxes is there any way around this. I would like to confirm the implications with a professional.

I thank you in Advance for a reply to this thread, this has been a year of change, and I just want to make sure we are doing what is best for the family.

ask your tax qestions at forums.serbinski.com

Once you actually move to US you will cease to be a Cdn tax resident.

Dear AGN

a friend of mine moved back to the US this Year after living and working in Canada and he kept his flat that i bought while he was there, i remember he said it was some paperwork to avoid being taxed in both country's but it he said if you don't have dual citizenship they only tax you in one.
Heinz

Im sorry the last post i meant to write "dear Unsure" and not "dear AGN"
Heinz

The first thing I would suggest is that you read the best book on the subject "The Border Guide.". It can be found on Amazon.ca

In general, there are some things that need to be done before you leave and some that need to be done after you leave Canada. As a rule of thumb, you will save about one-third in taxes each year. If you keep your Canadian home after exiting Canada, any appreciation from that time on, will be subject to tax in the US and Canada. You will have to file Canadian tax returns to report your rental activity. You will be allowed a tax credit on your US tax return, for Canadian taxes paid.

There are a lot of things to think about and to address before leaving Canada, so you should read The Border Guide to get a very good over of the issues involved.

If you pay tax in Canada on your rented home but then 'employ' a family member based there to look after it in your absence (similar to a realtor) you can then claim back this 'wage' money against rental income earned. Then perhaps your family member could 'treat' you to a holiday later in the year with what they have earned from you. Obviously it would have to be someone who does not have other employment and may count against their tax/benefit status. There are risks involved as this is somewhat of a grey area legally but may be worth it depending on what kind of slice the evil tax man is going to reap..

When I moved to the US nine years ago, the rules were you had to pay Canadian income tax on top of your US tax, equal to the difference between what you paid to the eagle versus what you would pay to the beaver -- unless you declared yourself non-resident. So I made that declaration and it went to a review board in Canada. They took a look at all my remaining ties to Canada and decided whether I was really going to be a non-resident or not. I had a bank account, credit card (no credit history in the US means I couldn't get a local credit card, despite daily offers for one), and an RRSP.

The RRSP didn't count against me, but the rest did. If I had maintained a residence in Canada that would have definitely counted against me. Fortunately they decided I was indeed a non-resident and so I didn't have to pay Canadian taxes on top of my US taxes. I don't mind paying my share of taxes, but it's not fair to pay taxes to a country I don't live in...

So my advice is -- sell your house to a trusted relative so it won't jeopardize your application for non-resident status. Maybe you can buy it back later, and just pay Canadian tax on the rental income, but you would still need to report it as foreign income to the IRS so I don't know if you can escape paying double tax on that. Of course, you should talk to a real accountant who knows both sides of the border.

Paying tax in both countries does not mean double tax. Credit is given for one tax on the other.

I already suggested forums.serbinski.com

... and, again, once you live an work in US, by treaty, you are US resident and Cdn non-resident, regardless of how many ties you have in Canada -- including an empty house or cottage.

i think its better to wait for the greencard. you'll have a lot of privileges. and i think it would be better 2 sell the other house.